Tuesday, 8 December 2015

Sunderland Asking Prices Are Down vs 2014 But Sold Prices Are Up

As 2015 draws to a close I thought it may be worth taking a quick look back at how the Sunderland property market has performed in the last 12 months

The first trend to catch my eye was that based on 3 month moving average data, Asking Prices are down on all property types compared to December 2014

The graph and below shows an average fall of 3% across all property types and that detached homes showed the greatest fall, being 12% down on December 2014 with an average asking price of £284,249 in December 2015

This goes against expectations as detached homes, typically appealing to more established, affluent buyers tend to be cushioned against market conditions and operate somewhat in a bubble

Semi's and terraces both showed decreases (1% and 3% respectively) with the Asking Prices for flats down 5%

I thought it may be interesting to compare this with sold prices (what is actually paid) and looking at this data gives a slightly more positive picture, with most property types showing slight increases in the prices paid this year compared to last

Given this is based on Land Registry data there is a slight lag in the data being registered and published, so for this we are comparing September 2015 and September 2014

The average sold price in Sunderland in £140,561 which is up 9% compared to the same time last year

Splitting this down to look at property types, detached properties have shown an increase of 13%, terraces an increase

The only property type showing a fall are semi's with an average sold price in Sept 2015 of £130406 compared to £137,758 in Sept 2014, a fall of 5%

Finally I've taken a look at the health of the market by comparing the number of properties on the market now vs 2014

Given the media headlines that the UK property market needs cooling (and the tactics and strategies being employed to solve that 'problem'), it's concerning that overall there are 10% fewer properties on the market in Sunderland now than in December 2014

Looking at this by property type the largest fall has been within semi detached properties (15% down compared to December of last year, with 584 properties on the market at the moment compared to 684 at the same time last year), with terraces and flats down 11% and 9% respectively, with only detached properties showing a slight increase 

The problem with this is that to be healthy and robust the property market needs to allowing a smooth flow where buyers can trade up from one property type to another in keeping with their economic progression & lifestage, with the typical property buyers 'journey' being from a flat or terrace First Time Buy to a larger terrace or semi, then eventually to a detached

When there are bottlenecks, caused by a lack of supply, it can destablise the market or cause price peaks if there are shortages of particular property types 

It may be that the relative lack of supply causes a correction in the sold prices of Sunderland semi detached properties next year and that if we looked again at the sold price data in six or twelve months time this would also be showing positive growth once again

Looking at these figures as a whole, it's interesting to note that Asking Prices are down yet Sold Prices are up - this may be explained by Asking Prices being informed by pessimism on behalf of local vendors and Estate Agents (so properties are being valued & advertised conservatively) but the relative scarcity is contributing to the increase in what is actually being paid

Overall whilst it is a little concerning to see that there are 10% fewer properties being advertised for sale now compared to the same time last year this scarcity may in turn lead to the modest increase in sold prices continuing into 2016, which could lead to a more positive outlook by vendors and Estate Agents and in doing so encourage more properties to be listed

Feel free to get in touch if you'd like to discuss any aspect of the Sunderland property market - call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com

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